Revolving Credit Mortgages

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Revolving Credit Mortgages

A Revolving Credit mortgage if used properly, can be a powerful tool. You can pay your mortgage off a lot quicker than you can under a standard "term" mortgage.

What is Revolving Credit?

A Revolving Credit facility is basically a large overdraft secured by way of a mortgage over your property. It can be taken for up to 30 years and only requires you to pay the interest each month.

The “Pros”

  • The facility is floating (also a potential “con”) but this does mean that you can make lump sum payments at any time without penalty.
  • As soon as you make a deposit you are only paying interest on the outstanding balance.
  • The facility is perfect for those people who have income which fluctuates as they can deposit funds as soon as they get them and draw on them as they require.
  • The facility provides a limit which can be redrawn to the maximum without having to go back to the Bank to apply for an increase.
  • The facility takes over from your normal cheque account and you can run everything through it without changing automatic payments or direct debits.
  • It can have a cheque book and debit card attached to it for access just as a normal cheque account.

The “Cons”

  • The facility is a floating one which means that as rates rise, so do your interest costs.
  • Being a facility which does not necessarily need to be repaid for up to 30 years means that people need to be disciplined to reduce the outstanding balance. Having an extra $10,000 (after paying this amount off) can be tempting, easily accessed and used at any time.

If you have a revolving credit mortgage or are thinking about one, read Revolving Credit – Using the Power or talk to us to find out how to get the most out of this arrangement.

Why Use a Mortgage Broker?

Because we can save you time and money

We can even get you that dream home that you might otherwise miss out on. Or enable that development project to build your business.

Find out more about why you should use a Mortgage Broker or just get in touch.

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